Spanish Coffee and the UK Housing Market

Spanish Coffee and the UK Housing Market

I have spent a fair amount of time in Spain of late. Apart from the sun, the sea, the sand and the sangria, which regularly catch my eye, I have been struck by the frequency with which I encounter groups of young people in Spanish cities congregating in groups, chatting and socialising. The same in any city? Yes but…

Get to the towns and young people are much less evident. Flight to the cities? Not quite.

Unemployment in Spain has just topped 27% (with a bullet). Unemployment amongst people under the age of 25 is now running at 57%. That is scary and has social unrest written all over it, and Spain has had demonstrations and the like. However, it seems many of the young people of Spain are finding a different solution.

I recently stopped for a coffee, at a café with a terrace overlooking a valley, leading down to the glistening Mediterranean sea. The sun was just about set over the mountains behind me. The lyrical sound of flamenco guitar carried on the evening’s gentle breeze…get the picture? The café was quiet and the young waiter, Jorge, who spoke English reasonably well, was keen to talk and learn about London.

Jorge was a business studies graduate from Valencia, who had managed to get the odd casual bar job, since graduating 3 years ago. His friend had just been on holiday to Berlin and had returned with one sole purpose, to learn German after which she would return to Berlin to look for work. She spoke English, but thought the German economy was a better bet. Lots of Jorge’s friends were leaving the country and Germany and the UK (particularly London) were the top two destinations. Opening a German language school in Spain right now is a smart business move.

And what does this mean for London? Our population is growing rapidly. Up to 9m by 2020 and 10m by 2030. The only other city in Europe with a bigger population is Moscow – but the weather is not as nice there.

We are going to see in London a sustained wave of young Spanish migrants looking for work and they will need housing. And young people have that awful tendency to multiply and so their children will need housing too.

And so if all the young Spaniards are living and working in London and Berlin, who is going to do the work if and when it appears in Spain? This is serious – who is going to serve me coffee?

Economists are now talking about the risk to Europe of “accelerating population imbalance” – that is the right people in the wrong place at the wrong time. If I can get a waiter and myself back to that café at the same time, I will reflect on that further.

Chris Wood.

Chris can be contacted on 07932 693292, chris.wood@nullaltairltd.co.uk and follow Chris on twitter @Chris_Altair